« ΠροηγούμενηΣυνέχεια »
the same persons may constitute different Co. v. Rude Bros. Mfg. Co., 60 Kan. 145, 150, identities of themselves, so that, as directors 55 Pac. $48. "Officers of a corporation, who of a corporation, they may convey, or mort are also its creditors, cannot lawfully pay gage, or contract with themselves as private their own claims in preference to other credpersons. The relation of debtor and creditor itors when the corporation is insolvent." implies antagonism, a countervailing interest Headnote 2, Clark Co. y. Colton (1900) 91 of distinct and independent parties. The in Md. 195, 46 Atl. 386, 49 L. R. A. 698. "The terests of self-preferring creditors are co-op directors of an insolvent corporation, being erative and the same. The more anxious as its creditors, cannot take advantage of their a creditor to obtain the preference, the more fiduciary relation, and deal directly with willing and ready as a debtor to grant it. themselves, to the injury of others in equal This puts the director in a situation wholly right. If they do, equity will set aside the incompatible with his duty to serve all stock | transaction at the suit of creditors of the holders and creditors fairly and alike. While corporation or their representatives, without not a trustee in a technical sense, there can reference to the question of any actual fraudbe no doubt that he occupies such a fiduciary ulent intent on the part of the directors; for position towards the stockholders and direct. | the right of the creditors does not depend ors as calls for a faithful performance of upon fraud in fact, but upon the violation of duty, and conduct entirely free from any use the fiduciary relation of the directors." Tayof his position to advance his personal inter lor v. Fanning (Minn., July 3, 1902) 91 N. W. ests beyond those of others of equal merit. 269. “At common law a debtor may prefer We have many American decisions in sup a creditor to the exclusion of others, but a port of this view, from the more recent of different rule prevails when the creditor is a which in the several states, though often not director of an insolvent corporation debtor. the best considered, I briefly quote: "It | The directors in such case are not strictly seems to be well settled that directors of an trustees for the general creditors, though insolvent corporation, who are creditors of sometimes so called, but they owe them a the company, cannot secure to themselves duty which is inconsistent with the taking any preference or advantage over other cred of a security for prior indebtedness to their itors in the payment of their claims." Bon detriment." Symonds V. Lewis (1901) 94 ney V. Tilley, 109 Cal. 346, 42 Pac. 439, Me. 501, 48 Atl. 121. "The corporation was quoted approvingly in Bank v. Ivett, 127 Cal. plainly insolvent, not a going concern, nor 134, 59 Pac. 393, decided December 11, 1899. one with any prospect of going on at any "It is not good morals, or good law." Fishel time in the future. It could not, in such conv. Goddard (Colo. Sup. July 5, 1902) 69 Pac. dition, prefer its directors, secretary, and 607, 612. “We think it very clear, therefore, treasurer." King v. Wooldridge (Oct. 29, that when the validity of these mortgages, 1900) 78 Miss. 179, 28 South. 824. "The propto secure debts upon which the directors were osition that an insolvent corporation cannot indorsers, was questioned by other creditors prefer a debt on which its officers and directof the corporation, they should have been ors are bound as trustees is now thoroughly classed as instruments rendered void by the established in this state.” Williams v. Turlegal principle which prevents directors of an ner (Neb., Jan. 8, 1902) 88 N. W. 668. "The insolvent corporation from giving themselves law will not allow the stockholders and offia preference over outside creditors.” Atlas cers of a corporation to take advantage of Tack Co. v. Exchange Bank (Aug. 7, 1900) their knowledge of the insolvent condition 111 Ga. 703, 710, 36 S. E. 939. "The law is, of the concern, and their power to use and however, that an insolvent corporation can control the assets to repay their own debts, not prefer a creditor who at the time is a or to relieve them from special liabilities to director therein." Rockford Wholesale Gro the injury of other creditors." Graham v. cery Co. v. Standard Grocery & Meat Co. Carr (May 6, 1902) 130 N. C. 271, 41 S. E. (Oct. 24, 1898) 175 Ill. 89, 51 N. E. 642, 67 379. "The law applicable to these cases is Am. St. Rep. 205. "In Hays y. Bank, 51 extremely clear. While directors of corporaKan. 535, 33 Pac. 318, it was held that the tions are not trustees in a technical sense, directors and managers of a corporation, who there is yet no doubt that they occupy a fiduwere creditors of the same, could not prefer ciary position towards stockholders and credthemselves, leaving the question undecided itors of the corporation, and that they come as to whether other creditors might be pre within the designation of persons filling a ferred. The ground of that decision is that fiduciary relationship. In fact, they hold a the directors are agents of the stockholders position of the highest trust, and will, thereand creditors, and that their interests as cred fore, be required to execute it with the utors would be inimical to their duties as most fidelity. This being so, it is plain that agents. They occupy a fiduciary relation to the defendants could not use their official the creditors and stockholders, and may not position to advance their individual interests. take advantage of their superior information But this is precisely what they did with and opportunity to gain an advantage over actual knowledge that the corporation was those whose interests they are guarding; nor insolvent.” Smith v. Putnam (1882) 61 N. are they permitted to contract with them H. 632. “The receiver of an insolvent corposelves as they may with third parties.” Plow ration may recover its assets, withdrawn,
after it has become insolvent, in order to tinue, and paid out $30,000 on its obligations,
ADAMS et al., Respondents, v. ELWOOD,
Appellant. (Court of Appeals of New York, a majority of the board of directors, may Oct. 14, 1902.) Motion to dismiss an appeal prefer themselves by appropriating all the from a judgment of the appellate division of corporate assets on pre-existing liabilities,
the supreme court in the Second judicial deafter they have determined that the corpora
partment, entered June 4, 1902 (72 App. Div.
632, 76 N. Y. Supp. 1008), affirming a judgtion is hopelessly insolvent, and will in a ment in favor of plaintiffs entered upon the few days abandon its corporate business. In report of a referee. The motion was made that case Justice Brewer rests the court's upon the grounds that the appellate division
had unanimously decided that the findings of ruling upon the fact that the stockholders ex
fact were warranted by the evidence, and that pressly, by vote, authorized the mortgage, there were no other questions of law to be and that at the time it was executed the cor
reviewed; also, that the appellaut had failed poration was a going concern, and intended
to file a proper undertaking. R. J. Shadbolt,
for the motion. William L. Mathot, opposed. to continue in business, and in fact did con- | No opinion, Motion denied, with $10 costs.
pellants. Harold Nathan and Edgar M. Lev-
PER CURIAM. Judgment (59 App. Div. PARKER, C. J., and GRAY, O'BRIEN,
PARKER, C. J., and GRAY, O'BRIEN, VANN, JJ., concur.
BINZEN, Respondent, v. EPSTEIN et al.,
Oct. 7. 1902.) H. H. Snedeker, for appel-
fler, for respondent.
PER CURIAM. Judgment (58 App. Div.
304, 69 N. Y. Supp. 789) affirmed, with costs.
PARKER, C. J., and O'BRIEN, BART-
WERNER, JJ., concur.
In re BLACKSTONE'S ESTATE. (Court
of Appeals of New York. June 24, 1902.)
Edward W. Sheldon, for appellant. Julius
Offenbach and Thomas Penney, for respond-
PER CURIAM. Order (69 App. Div, 127,
74 N. Y. Supp. 508) affirmed, with costs, on
the_ground that this case is controlled by In
re Houdayer's Estate, 150 N. Y. 37, 44 N. E.
718, 34 L. R. A. 235, 55 Am. St. Rep. 612.
Motions to dismiss appeal and to correct rec-
ord denied, without costs.
PARKER, C. J., and GRAY. HAIGHT,
cur. O'BRIEN, J., dissents.
In re ARKENBURGH et al. (Court of
BLOOMINGTON MIN. CO., Respondent, v.
lant. (Court of Appeals of New York. June
10, 1902.) L. Laflin Kellogg and Alfred C.
Petté, for appellaut. Franklin D. Peale, for
PER QURIAM. Judgment (58 App. Div.
66, 68 N. Y. Supp. 699) afirmed, with costs.
In re BAKER. (Court of Appeals of New
BOYLE & EVERTS CO., Respondent, v.
FOX et al., Appellants. (Court of Appeals of
New York. Oct. 14, 1902.) Motion to dis-
late division of the supreme court in the First
judicial department, entered June 2, 1902 (72
a decision of the court on trial at special term.
there was no question of law involved in the
therefore, no jurisdiction to entertain the
Milton Mayer, for the motion. Jo-
PER CURIAM. Judgment (57 App. Div. $10 costs of motion.
BREED et al., Appellants, V. RUOFF et
al., Respondents. (Court of Appeals of New
and | and Russel S. Johnson, for appellants. Thad-
deus D. Kenneson, for respondents.
PER CURIAM. Appeal dismissed, with
costs. See 69 App. Div. 620, 75 N. Y. Supp.
opinion delivered on previous appeal. 162 N. Y.
PARKER, C. J., and GRAY, HAIGHT,
PARKER, C. J., and O'BRIEN, BART In re BULLIS. (Court of Appeals of New
York. June 27, 1902.) Adelbert Moot and
Charles S. Cary, for appellant. C. Walter
Smith, for respondent.
PER CURIAM. Order (68 App. Div. 508, 73
and WERNER, JJ., concur. PARKER,
CASSIDY, Respondent, v. UHLMANN, Ap-
pellant, et al. (Court of Appeals of New York.
505, 63 N. E. 554.
In re BRUSH. (Court of Appeals of New
OITY OF ROCHESTER, Respondent, V.
ROCHESTER BILL POSTING CO., Appel-
(Court of Appeals of New York. Oct.
14, 1902.) Motion to dismiss an appeal from a
judgment of the appellate division of the su-
preme court in the Fourth judicial department,
made at the March term, 1902 (70 App. Div.
623, 75 N. Y. Supp. 1122), affirming a judg-
was made upon the ground that the return on
land, for the motion. No opinion. Motion
CITY TRUST, SAFE DEPOSIT & SURE
TY CO. OF PHILADELPHIA, Respondent, v.
YORK, Appellant. (Court of Appeals of New
Swift, for respondent.
PER CURIAM. Judgment (58 App. Div. 18,
68 N. Y. Supp. 601) affirmed, with costs.
N. Dykman, MARTIN, VANN, CULLEN, and WERNER,
PER CURIAM. Order (76 N. Y. Supp. CLARK, Respondent, V. BIRD, Appellant
(Court of Appeals of New York. June 27,
1902.) Motion to dismiss an appeal from a
judgment of the appellate division of the su-
preme court in the Fourth judicial department,
sion of the court on trial at an equity term.
tion. W. A. Sutherland, opposed. No opinion.
costs. See 66 Ápp. Div. 284, 72 N. Y. Supp.
CONDE, Respondent, V. LEE, Appellant
(Court of Appeals of New York. May 29,
PARKER, C. S., and GRAY, O'BRIEN,
GRAY, O'BRIEN, HAIGHT, VANN, and
DORNEY, Respondent, v. O'NEILL, Appel-
1902.) David B. Hill and Eugene Lamb Rich-
ards, Jr., for appellant. Charles Steckler and
Levin L. Brown, for respondent.
PER CURIAM. Judgment (60 App. Div. 19,
PARKER, C. J., and BARTLETT, MAR.
TIN, VANN, CULLEN, and WERNER, JJ.,
concur. O'BRIEN, J., not voting.
DUNICAN, Respondent, v. UNION RY. CO.
| A. Irish, Charles F. Brown and Henry A. Rob-
inson, for appellant. William J. Martin and
PER OURIAM. Judgment (56 App. Div. 181,
67 N. Y. Supp. 619) affirmed, with costs.
PARKER, C. J., and GRAY, O'BRIEN,
BARTLETT, MARTIN, VANN, and CUL-
LEN, JJ., concur.
In re EDISON ELECTRIC ILLUMINAT-
ING CO, OF BROOKLYN. (Court of Appeals
of New York. June 24, 1902.) Frank Harvey
Field and Edward M. Shepard, for appellant.
George L. Rives, Corp. Counsel (James McKeen,
of counsel), for respondents.
PER CURIAM. Order (72 App. Div. 632, 76
N. Y. Supp. 1013) affirmed, with costs.
VANN, and WERNER, JJ., concur. O'BRIEN
DEERING v. SCHREYER et al. (Court of
FALK et al., Respondents, V. AMERICAN
| WEST INDIES TRADING CO., Appellant.
(Court of Appeals of New York. June 18,
320, 75 N. Y. Supp. 964), upon an order of the
term. The motion was made upon the grounds
and order are not appealable. Morris S. Wise,
for the motion. Isaac M. Aron, opposed. No
opinion. Motion granted, and appeal dismissed,
DIMON, Respondent, v. NEW YORK CENT, FOGERTY, Appellant, v. UNION RY. CO.
son, for respondent.
PER CURIAM. Judgment (56 App. Div.
624, 67 N. Y. Supp. 1133) affirmed, with costs.
PARKER, C. J., and GRAY, HAIGHT, and
| WERNER, JJ., concur. MARTIN, VANN
| and CULLEN, JJ., not voting.
FOGERTY, Appellant, v. UNION RY. CO.
Appeals of New York. Oct. 14, 1902.) No
opinion. Motion for reargument denied, with
$10 costs. See 171 N. Y. 670, supra.
PER CURIAM. Order (70 App. Div, 370, FRANCIS v. WATKINS et al. (Court of
| Appeals of New York. June 24, 1902.) Louis